Artículo #45
Market Intelligence
Chile has a significant heritage, wealth and legacy in its wine industry, but today everything seems difficult, even for the big players. Although exports have undoubtedly penetrated 156 markets and have grown 1,9% (CAGR) in the last decade (WoC, 2020), one of the industry’s challenges is to broaden the number of players that actually export. Today Chile’s wine industry is concentrated in only 7 companies that account for 75% of the market, with an average export value of US $ 26 FOB (9L case) which has fallen by 10% in the last year for Chilean vineyards. Wine exports represents 1,5% of the exports in value, of great relevance to our economy. There’s been a jolt in the destiny of exports with China having taken the lead, and the emerging BRIC economies becoming more relevant. With the changing world of technology - Big Data, for example - the dampening effects of the COVID 19 pandemic, the phenomena of climate change and varying production around the world affecting supply and demand, have put a rope around the necks of many.
Texto destacado
Chile has a significant heritage, wealth and legacy in its wine industry, but today everything seems difficult, even for the big players.
In this context, how can we envisage a more prosperous future for market players? Where are some the shortfalls and how can these risks be mitigated to ensure healthier development?
It is vital that we work with a plan based on a solid value proposition, understanding the needs of the market and if there is a real demand for the product or service. It is relevant that the analysis goes beyond the Chilean wine offer, since trends in international markets are also pertinent as they are part of the competition analysis and the value positioning statement. Understanding your final consumer trends, distributors and wholesalers will also shed light on anticipating demands.
The financials are what makes or break you at the end of the day; control of operating expenses and sales flows, back up capital, a fluctuating dollar, the picture tends to get complicated. Just last year alone in 2020, the international currency varied by more than 13%. Strategic business decision making is critical.
It all boils down to understanding risk, assessing it so that at the end of the day there is the minimum level of surprises. As the saying goes "prepare for the worst and hope for the best".
Today, customers have increasingly better access and use of data, products and evaluation of them. It is therefore inherent, especially in this global recession, that an action plan be put together that is not only consistent with market data, but is competitive, with an integrated leg of thorough and robust market intelligence. Ideally, target the market and audience where one's product has a competitive advantage, thus enabling a focus of resources; time, headcount and promotion.
Chilean players have access to export data from different organizations through our customs office, as well as through Wines of Chile, ODEPA, Nielsen, Wine Intelligence, Euromonitor, DataSur and Intelvid among others, which can provide insight on market trends, and more precisely by product segment. It is regarding this approach that I would like to draw your attention, as empirical data will clarify the product category and the growth potential, information that can be crisscrossed with other sources and will validate and strengthen your decision making.
The challenges of today are now Superseded by the raging changes in consumption patterns. Consumer tastes and preferences are changing all over the world, as is their set values with regard to what brands offer and represent. Their commitment to the environment, closer relationship with customers, social responsibility and authenticity are factors that influence their final buying criteria. It is worthy revaluating promotional strategy to reach this very changing dynamic and selective consumers.
All of the above, together with the overriding fact that the explosive entrance of the so-called “Generation Z†-born between 1995-2010- that will soon surpass the “Millennials†-born between 1980-1995- (World Economic Forum, Nov 2019) a new human group characterized as “Digital nativeâ€, tech-savvy conscious of sustainability and definitely shifting from the conspicuous to “conscious consumption†is key in the understanding of future market scenarios. The wine market must be prepared to evolve alongside these new consumers, in current times.